The joint Senate Committee on Public Accounts and Power, Steel and Metallurgy, on Wednesday criticised the Federal Ministry of Power, Works and Housing over the terms of agreement with General Electric for the construction of the Afam 3 Fast Power Project.
The committee condemned the release of $27.9m to General Electric at zero interest rate, out of the $350m domiciled with the Nigeria Sovereign Investment Authority, which was from the Eurobond obtained by the Federal Government.
The facts were revealed at an investigative hearing by the panel in Abuja on Wednesday.
The $350m belongs to the Nigeria Bulk Electricity Trading Company but is domiciled with the NSIA.
The money, which was released by the NSIA on the request of the Ministry of Finance, was meant to acquire equipment for the project.
Members of the panel, however, criticised the project as leading to a loss for Nigeria, stressing that the contractor, who was supposed to raise 85 per cent of the project cost, could demand for the money when the firm had not spend any amount on it.
The panel, therefore, asked the Debt Management Office and General Electric to explain the circumstances surrounding the withdrawal and expenditure of the fund.
The Executive Director and Chief Risk Officer, NSIA, Mrs. Stella Ojekwe-Onyejeli, while defending the release, told the lawmakers that although the money was from external borrowing, the agency had no powers to question the release at zero interest since it was keeping the money on specific terms of agreement.
She said, “The $350m in question, which was given to the NBET by Federal Government, is in the custody of the NSIA. We have an investment agreement between ourselves and the NBET which spells out how we manage those funds on their behalf.
“These funds were not meant for trading, they were meant, via instruction from the Federal Government, to be handed over to the NSIA to invest on their behalf.
“I can give an estimation of the amount. We were given $350m in 2013 to manage, and till date, there is a balance of about $380m principal plus accrued interest. Last year, there was a drawing of 13.5 per cent for payment of interest for the Eurobond.”